Kominicki: The FTC’s plan to save us has a familiar ring to it

The Federal Trade Commission has outlawed computerized telemarketing to consumers, significantly limiting the pesky “robocalls” that have bombarded American households over the past few years.

I’ll pause while you say, “Darn, I really enjoyed those calls, especially the ones at dinnertime.”

The ban, which begins this week, follows legal action by the FTC in May against two Florida-based firms the agency says were responsible for a giant phone scam that tricked millions of Americans into believing they could extend their car warranties for a payment of between $2,000 and $3,000. Most people who bought the coverage found it was not accepted by their dealers.

Really.

According to the FTC, a Fort Lauderdale firm called Transcontinental Warranty targeted specific geographic areas, sending out millions of advance postcards warning residents their auto warranties were about to expire. A Daytona Beach-based telemarketer, Voice Touch, then followed up by phone, using robocalls to blanket the area.

The calls went to every number listed, regardless of whether it appeared on the national Do Not Call Registry, including government offices, 911 operators, even – oops – the Better Business Bureau. Voice Touch made as many as 1.8 million calls a day, the FTC alleges, ultimately dialing more than 1 billion numbers for the pssst-wanna-extend-your-warranty industry.

A third firm, Network Foundations of Chicago, was also implicated by the FTC for creating “spoofing” software that tricked caller ID systems into thinking the calls were coming from other numbers. Telemarketers were trained to expertly make the sales pitch while knowing exactly zero about the customer, including the make or model year of the car or whether they even owned one.

The system was good – it raked in at least $10 million in profits in two years – but not good enough to fool some 300,000 angry consumers, who filed complaints with the BBB and formed a torch-wielding e-mob at online sites such as whocallsme.com.

Christopher “Big Chris” Cowart, the CEO of Transcontinental Warranty, was singled out for special abuse on the chat sites, and accused of everything from simple slimeballishness to hitting on the help and snorting coke in the company parking lot. One POed customer went so far as to post Cowart’s personal cell phone number, encouraging readers to call at odd hours.

I recommend dinnertime.

The FTC case was bolstered by a couple of former Transcontinental workers who gave the agency details on how the scam worked, including holding up the paperwork for 31 days so victims were unable to file for a refund in the required 30-day window. Telemarketers were also told to withhold Transcontinental’s name from hostile customers and quickly move on to another call, a technique that spawned the company motto of, “Hang up. Next.”

Customers who demanded to know how they could contact the company were sometimes given the number of a porn hotline.

Former staffers also griped that the firm hired walk-ins off the street and used work-release prisoners to make calls, a clear insult to the professional telemarketers at the company who were, well, also ripping people off but doing it in a professional manner. The company did spring for McDonald’s food for those working the Saturday shift, former workers concede, but the millions in profits went to the executives while the sales staff labored for minimum wage.

When is a Happy Meal not a happy meal? When you get the fries and the boss gets the coke.

What Transcontinental and Voice Touch failed to realize is that Americans are fed up with telemarketers to the point of – listen up, Big Chris – actual physical violence. As one angry Transcontinental customer put it on a chat board, “Anyone connected to this company should be waterboarded at Gitmo.”

Another had this comment for current and former Transcontinental employees: “I hope that you contract a nasty disease that bothers you night and day for months on end. An itch that makes you scratch until you bleed, then the sores fester for months, never quite healing. Then you’ll know how you made 75 million Americans feel.”

Now, that guy’s angry.

We are, in fact, all angry: More than 160 million of us have placed our names on the national Do Not Call Registry, and there are only 105 million households in the country.

So many people have complained about the auto warranty calls that scammers have been forced to abandon the business completely . and move on to calls offering low-rate mortgages and plans to reduce your credit card rates. Luckily, the FTC has sprung into action. The agency’s new rules on robopestering limit contact to customers from whom the telemarketer has written permission to call. And that must be a very short list. Violators also face fines of up to $16,000 per call, which should severely reduce how
much cocaine they can buy.

One bit of bad news: The new rules exempt calls giving information on flight cancellations and home deliveries and those from debt collectors, politicians, charities, banks, phone companies, insurers and survey takers.
Dinner, in other words, is still not safe.

One comment

I got one of these calls and so did my daughter. She almost fell for the scam but fortunately she asked me about it before taking action, something she rarely does but in this case did. Whenever one these telemarketer calls and happens to get me on the phone, I always tell them to give me their phone number so I can call them back and harass them at my convenience. Most times they don’t have anything in their script that allows them to respond to that request. It doesn’t solve the problem of receiving these annoying calls but it provides me with a small sense of satisfaction nonetheless.